Q.E.P. CO., INC. REPORTS FISCAL 2026 SIX MONTH AND SECOND QUARTER FINANCIAL RESULTS DECLARES THIRD QUARTER CASH DIVIDEND
BOCA RATON, FLORIDA — October 15, 2025 — Q.E.P. CO., INC. (OTCQX: QEPC) (the “Company” or “QEP”) today reported its consolidated results of operations for the first six months and second quarter of fiscal year 2026, which ended on August 31, 2025.
Results of Operations
Net sales for the six months ended August 31, 2025 were $119.2 million, down $6.9 million or 5.5% from $126.1 million reported in the same period of fiscal 2025. Net sales for the second quarter ended August 31, 2025 were $57.7 million, down $4.9 million or 7.8% from $62.6 million reported in the second quarter of fiscal 2025. Net sales through the first six months of fiscal 2026 continue to be adversely impacted by elevated interest rates and consumer caution amid ongoing economic uncertainty, which have constrained home improvement spending.
Gross profit for the first six months of fiscal 2026 was $43.3 million compared to $44.8 million in the corresponding fiscal 2025 period, down $1.5 million or 3.4%. Gross profit for the second quarter of fiscal 2026 was $20.6 million compared to $22.3 million for the second quarter of fiscal 2025, down $1.7 million or 7.6%. As a percentage of net sales, gross margin for the first six months and second quarter of fiscal 2026 was 36.3% and 35.7%, respectively, up from 35.5% and 35.6% in the same periods of the prior fiscal year. The Company has maintained its gross margin as a percentage of net sales principally through the sell-through of inventory purchased before recent tariff increases. Current inventory values reflect the incremental tariff cost that will cycle through gross margin in the coming months.
“Thank you to the 350 QEP Associates who wake up every day to serve our customers.” said Len Gould, President and Chief Executive Officer. “Despite tariff variabilities and a challenging economic environment, we continue to fill orders at or near 100% levels, while shipping 100% on time.” Gould continued, “QEP has transformed itself mightily over the course of the past few years. Our balance sheet has never been stronger. We remain absolutely laser focused on fast tracking innovation throughout our business, all while continuing to invest in our domestic manufacturing base.”
Operating expenses totaled $32.9 million and $16.0 million for the first six months and second quarter of fiscal 2026, respectively, or 27.6% and 27.8% of net sales in those periods, compared to $34.5 million and $17.2 million, respectively, or 27.3% and 27.5% of net sales in the comparable fiscal 2025 periods. The reduction in operating expenses reflects lower variable freight costs and personnel-related expenses.
Interest income from the Company’s invested cash was $0.4 million and $0.2 million for the first six months and second quarter of fiscal 2026, respectively, relatively unchanged from the comparable fiscal 2025 periods.
The provision for income taxes as a percentage of income before taxes was 26.0% for both the first six months and second quarter of fiscal 2026 versus 28.0% in each of the corresponding fiscal 2025 periods.